eastern on c-span, online, or c-span now, our video app. >> c-spanshop.org is c-span's online store. browse our latest connection -- collection of products, books, and accessories. there is something for every c-span fan and every purchase supports our nonprofit operation. shop anytime at c-spanshop.org. >> the wilson center hosted former afghan financial officials and diplomats for a conference on the upper manic -- economic situation in afghanistan under the new taliban regime. >> which aims to ensure a

continued focus on afghanistan after the u.s. withdrawal. i would like to thank our partners for this event. we are cohosting this event with an informal group of senior officials cochaired by one of our speakers today. i thank them for their support for this event. i also think the wilson center's new program for serving as a cosponsor. let me provide some brief framing. we all know about the terrible humanitarian crisis that afghanistan is experiencing right now. the food insecurity, millions in danger of starvation, nearly 100% of the population likely to be plunged into poverty in 2022. basic services including healthcare unavailable. this is a story that is being discussed daily and for good reason. our event and tend to go beyond

the humanitarian crisis and focus on the broader economic crisis that afghanistan is facing, one that is a liquidity crisis. afghanistan is dependent upon international assistance. that international assistance accounted for a whopping 40% of annual gdp in afghanistan and yet, international sanctions and frozen assets mean that money is not flowing into the country. banks are out of money, businesses are struggling to operate, people are not getting paid and the economy is struggling to function. economic experts believe that the afghan economy could contract by 30%, 40%, even 50% in the coming years and according to "the new york times," an article published recently in an announcement not yet formally announced, the u.s.

plans to split up $7 billion in frozen bank assets between humanitarian assistance and assistance for 9/11 victims families. that's a decision that could have major impacts on afghanistan's economy and we will discuss that today. the focus is how to address the broader economic crisis, how to go about getting money injected back into the afghan economy. even with the constraints posed by sanctions and nonrecognition of the taliban government, none of us participating in this event today mean to diminish the importance of the humanitarian crisis. we all agree that efforts must continue to bring relief supplies into afghanistan, especially as the brutal winter continues. it deserves this, because humanitarian relief is not enough to right afghanistan's economic ship. if steps are not taken to address afghanistan's liquidity

crisis and banking crisis, then the humanitarian crisis won't go away. and the food shipments and other relief supplies for the humanitarian crisis as critical as they are, will only be temporary bandaids if the broader economic challenges are not addressed. the international community is well aware of this and speaking from a normative context, there is a strong consensus that something must be done beyond humanitarian relief to bring more sustainable relief to afghans. to quote a joint statement, representing european and u.s. governments after a meeting with the taliban in oslo earlier this month, quote, "we noted that our governments are supporting the revival of afghan's economy, participants know that the importance of increasing cash liquidity and support to the banking sectors to stabilize the afghan economy." so the consensus within the afghan community is there, but in terms of developing actual plans for easing this economic crisis, there's no concensus on that and that's why i think that events like today could be

helpful. we've convened a terrific group of experts, all former senior officials in the afghan and american government to provide some solutions-based input. they have been asked to offer proposals or recommendations or suggestions in concrete forms how to address the economic crisis given the constraints. there have already been a number of suggestions put out there by economists and independent experts and we'll get to some of them today, but we wanted to dedicate a session to considering a range of proposals from a range of thinkers. we are fortunate to have this group with us. we have the ceo of the bank, a former afghan finance minister, the former governor of the afghan central bank, a former senior policy advisor at the u.s. treasury department and

current senior fellow of state craft initiative at the atlanta council and last but not least, earl anthony wayne, a former career ambassador to afghanistan who is now a public policy fellow at the wilson center. we will have some brief opening comments and then i will take questions from the panel to the audience. if you have a question, please email it or tweet it. one caveat i will make before we start. our experts will be offering recommendations for how to move forward. their views represent their own views, not those of the wilson center. we did not take institutional positions on policy issues, but instead provide a place for these discussions to take place. let's start with opening comments and we will go to our speaker. over. >> thank you, michael, for being

with us. i'm really grateful to speak and share with you our position. and in the central bank of afghanistan in 2009 to operate in the commission private bank. the situation remains articulate difficult. as economic and issues -- economic conditions continue, a lot of inflation is being driven by increasing prices of household goods. the demand for labor continues to decline. private sector employees are still leaving the country, which has created a significant challenge. the exchange rate continues to depreciate.

the dividends from the banker still shrinking. the availability of cash in the bank has decreased consequently. it has increased in the market. since the financial sector is the backbone of the economy, it is important that policymakers give priority to the sector to bring financial stability. the banking sector the banking sector in afghanistan has experienced three shocks. the first shock was in 2020. as a consequence, some banks in afghanistan, increased in mpi and impacted. and the second shock, when lose the key programs in afghanistan.

so the businessmen and woman, and on the bank from banks in afghanistan to their accounts overseas. then the third shock, when the taliban regime began. when the taliban took over kabul and the panic on the part of the bank and want today withdraw their entire deposit in fear of losing money because the banks would not be able to pay or to honor their request deposits. now it's extreme stress we're experiencing. as banking is all about trust and during a political crisis people have lost their confidence in the banking sector.

options and also rebuild the people's trust. using the bank will build people's confidence and help in the crisis. and the center bank may take a balanced approach to bring relaxation on the limits for the cash withdrawals. the second option in some point your treasury office may bring more relaxation to allow agencies or national organizations or to work the policy makers how to work in the environment, but if they decide to leave the portion of foreign exchange, probably it would be an option to provide cash to the central bank. directly. and the good news is that today in the new york times, i hear that the biden administration

decided to on freeze $3.5 billion in assets -- unfreeze $3.5 billion in assets. and i would like to appreciate in support of the presence in afghanistan, the american chamber of commerce, and i know how he was trying to actually have this matter between afghanistan bankers and also with, and working with working with the central bank in the state of private commission bank and the central bank, it will build the trust of the people, in the banking sector and the central bank may have the functional options again, from the last six months, and that will control inflation and the position of local guarantee against foreign currency.

i think also the central bank needs more skilled employees to ensure some monetary policies to promote low inflation, and in the financial system of afghanistan and help the financial system operate efficiently in the current crisis situation. there are some others that may consider in the banking crisis. this is for the limits with the current situation. it will rebuild the confidence of the people and they will bring back again their cash to the accounts in the bank. also, since the bank is not for some, which is expected to

increase the quarter, will dynamically hit the bank's volatility. in the assets it will force the banks to go into undercapitalized situations. therefore banks will need new capital injection through the donor's support. if any banks go into the under capitalized situation. and also, they may help the banks for international or multilateral organization, may help the banks for the relationship with banks in afghanistan for approved transactiona and afghanistan is a country. the banks routing transactions relative to afghanistan because they have their own internal sites through afghanistan banks

and we're operating, by the way, under the provided under the central bank of afghanistan. so this is also one of the, one of the major one of the constraints in the current situation because when we're trying from afghanistan to outside -- any corresponding banks, it's really, really tough to get the approval of u.s. banks because any transaction needs to process through the u.s. banks. there are lot of questions and inquiries and sometimes, most of the time if the bank is routing , through ngo's and commercial organizations to corresponding

banks. thank you. >> well, thank you very much, it's interesting food for thought and what's the key, and we'll get into that later. let's move onto our second speaker. colin, over to you. >> good morning. and good afternoon. good morning in washington d.c. and good afternoon kabul and other places. i'm honored to be part of this panel and talk about this important and timely discussion. i wanted to thank the wilson center for hosting this discussion, but i also wanted to thank the informal group in -- on afghanistan, organized by ambassador and the country did so much with the assistance in having these discussions. now straight into my opening

remarks. just a bit of background, the afghan economy was already reeling from a compensation of jobs, third wave of covid and the displacement, that were intensified. but let's not forget that this could have been avoided had the taliban not captured by force and had the international community not suspended abruptly , we might not have been in this dire situation. while we would not talk about humanitarian assistance, but i wanted to mention that afghanistan needs more than humanitarian assistance. the economy has collapsed. people will not do it and ensuring service delivery such as housing, development, to start with, our crucial first

steps to make sure that a larger portion of the population does not slip into poverty. so what needs to be done? i think the action and need action is needed. i see a lot of reluctance from key players and development in afghanistan and i'd be very frank, you know, history will not judge them very fairly if they continue to do this and i believe there's a world bank, too, starting with we did not have to start recognizing taliban to be able to help with the situation, at least get the facts and basis of data and surveillance correct. effectiveness, i want to stress this, it's less about, but more

-- the conduit of money and more about how it is channeled and spent. while the humanitarian by the u.n. has resulted in, and in some of the pledges, but we need to see them on the ground and it's more how the aid is channeled. because in my experience, i've seen that, you know, it's more about how you spend money rather than the quantity of family. and i think i have a couple of points for the taliban as well. i do not want to anger people with political comments. i don't think it's my place. it's for people who deal with politics, but i believe there is no other way, other than working with a government. and i hope that the taliban understands this and i hope that they've learned from the mistakes that other regimes have made in the past.

true legitimacy comes from afghan in the country. if the taliban wants recognition internationally they must understand and the legitimacy does not come from foreign embassies, but from the afghan people. and i say this from someone in the previous government that learned the hard way. this point must be stressed by the donors of the international community. and a good start would be making strides on basic human rights for men and women, retain the afghan community that's been over the past 20 years and demonstrate for the taliban to demonstrate that they're allocating the domestic revenues they have collected for some of what they have, civil servants, but also, other expenditures and do it transparently.

the international community should also seek guarantees that they flow without hindrance by the taliban. what does it mean? specifically no discrimination, in access, fairness in the recruitment process, access for monitoring transparency and reporting our essentials. coming to the hot topic of the, and the reserves, really. i think it's important for us to understand that the release of the resolve will not fix all of afghanistan's economic woes. and some places are unrealistic expectations and takes the focus and energy away from what needs to be urgently addressed. i think it's important to understand that the economy it not collapse primarily because the abrupt stop in aid that came

to the country, which amounted to $8 billion a year. there are three important questions in the monetary space. i know the government will talk about this, but how can aid be brought to afghanistan is an important point as the central bank adequately staffed and independent in its mandate to enable the bank even only domestically in the transactions until there is enough liquidity in the country to allow economic activities. liquidity, are there enough, do people have access to them? and on ways it bring money and aid to afghanistan.

it's excellent work and the options that they have. and on others, ideally the central bank should be fully independent to carry out the functions. i say ideally because this would require after understanding by the taliban. i don't see any other alternative that are ideal in the current situation. and this would include the new banking supervision, monetary policy, market operations without any political influence, including printing of new afghani notes. it's important that the point of access, starting with the portion that would enable private parties, both businesses and individuals and release funds for the banking sector to the the net reserve, a

portion that belongs to the whole nation, i think with political settlements. it requires a legitimate inclusive and organized afghan government in place. additionally the primary reason , for the reserve is to keep the currency stable and cannot and should not be use today finance any expenditures and long-term discusses and discussions that include generational aspects such as future generations of afghans and they also should have a say on this. i close with one point. i think that afghan institutions and afghan capacity should not be forgotten in this discussion . i think it's important to preserve the system and retain the good people. there are a lot of good people with whom i'm in contact on daily basis who would need support. they know how to run

institutions and they would be the ones with the program, be it through international agencies, be it the u.n. or any government. you know. at the end of the day, those are the afghans who have progress. i think that some of the taliban -- steps that the taliban has taken with the private sector, addressing some of the corruption at the time my colleagues have struggled so much with our commendable. more needs to be done. an economy can work when people feel safe about their investments. they see a longer term sustainability and a role to play. he'll stop here and look forward to the rest of the discussions, thank you. >> well, thank you very much. let's now move on to our third speaker.

over to you. i think you're muted, sir. you have to unmute yourself. there we go. >> good morning. everybody. thank you very much for this have important meeting. i believe the new subject for today's discussion is how you internalize liquidity to any of the people in afghanistan. the big problem is that the lack of liquidity in the country. the central bank doesn't have anything no dollars in their vault. commercial banks they don't have liquidity even with the central bank. so it's not from damage and

accommodation from these banks, they have their problems and people are in need of money. and what we have started now, the united nations and some organizations, that there are moving cash from afghanistan to the commercial banks, but this commercial bank is only to have these dollars which are subject per week. and it's psychological in the market, which brought down these exchange rate of afghanis for the dollars. so from the other side, there's a problem, i believe that i was in afghanistan in 2016. we had over $80 billion in our resources.

and part of this almost 90 billion again. and to that after this year that next issue were between 3 to 5 billion. because you were collecting from the market by optioning dollars each week. so we didn't need to inject more money. into circulation. and i believe that they knew, the market was not more than $5 billion per year. and in 2020 and 21, the amount of options in the market was double in 2019. so if you're able to collect more.

really, the taliban is just trying turn our future not one into this, because there is a lot of complaints that in the markets, they are all, so that's one thought. so how to enable the people to reach or take this credit from the commercial bank. one is with the commercial bank pay the salaries of the doctors, teachers, and other social service employees. they can do it through the bankers in dollars or with the central bank converts. they say that they have it, but i doubt that they haven't. to exchange it.

that's one part of it. and only, now because the central bank is not able, and now in the community, in foreign countries are not ready to work with the taliban directly to inject liquidity into the economy in afghanistan. and that would be to shift the part of the jobs into the commercial banks. and the second part on that of the central banker, that when international organizations or countries are dealing with commercial banks, only in the bank of banks which had the high level of corporate governance and due diligence, otherwise these banks, some of them are

really not trustable. you have a lot of problems and the letter which has now in these banks, they are because of this, that the shareholders, and they have created this problem. and that's my recommendation. and for afghan, the other thing is that i believe that is to allow the bank of afghanistan to be able to print and have afghani, to print afghani to the company and pay their printing. it could be the same time, the same logo, everything the game. -- the same. but otherwise this would be a big problem. you know that afghanistan is going to be highly dollar, highly dollar, the foreign currency, so we are increasing

this this, the economy in part of the country. so we have to find a way how to establish general liquidity into the market. to allow the central bank of afghanistan because it should be considered a nonpolitical organization. so they have to print needed, but the same logo, the same thing which would he have now in circulation to enable the people to benefit from that to solve the problem of liquidity. this afghani decrease because dollar cannot reach in afghanistan, so many teachers and doctors and other people, how can they rich, how can they

market and purchase. other humanitarian help which is in kind like medicine and food items, i heard that may, these distribution and companies are hiring citizens pakistani, other , countries, they have to use afghan let them figure that one. don't allow to come here from the economic position and situation in afghanistan. that's my recommendation, to be honest in the similar situation here in kabul or in afghanistan, unfortunately 99% of the people have been taken hostage.

because of the liturgical lien of the government which is on the countries, if they want they're re it's not solving the problem of afghanistan, only problems that we solve if they can just go and have contact with foreign countries, have friends, political organizations, in this case the economy would survive and increase all of the production. otherwise they cannot do that. and 50% and 5% off this money and from 9/11 [inaudible]

i am against this one, i am not saying the victims should not receive it. but who did 9/11? it was al qaeda. they have to be not from the poor people of afghanistan. not from them. to summarize this one, we know from the commercial bank of banks liquidity, they have to come from the bank and they have the possibility for the teachers and then the government, so-called government of afghanistan and now they have to provide the list of doctors and other experts who are supposed to receive this salary from the

united nations and the bank. based on this, this will be coming to the banks and people deserve it and need it through the citizens. i do not have anything more than that. thank you very much. >> thank you very much. another important point including needing another way to establish the currency. let's now go to julia julia , freelander. >> thank you, michael, it's a pleasure to speak with esteemed experts today. and i'm not an afghanistan expert. what i can talk about the work that my team has done with the

liquidity issues. we were approached in december by a group of humanitarian and foreign governments saying we need to put our heads together and what are the alternative delivering liquidity to the country. and there are two premises there. one is that, and one was half solved by the administration's announcement today that there will be ongoing litigation regarding central bank assets and the second that the state department's designation is the taliban as a terrorist organization is going nowhere. that, of course, leads to an on sort of stream effects within the commercial banking sector and a broad scale of risk that my colleagues have discussed drying up on the ground.

we've assembled a group of regulatory experts, financial sector experts, people in new financial technologies to think, well, what are some alternative ways of handling this? the thought was to establish a risk management framework regarding afghanistan jurisdiction different ngo's, , different banks, all seemingly having a different risk profile and risk with regards to afghanistan. and there's precedence for this, specifically in syria, which by some counts is the most sanctioned jurisdiction in the world, to provide an agreement of how jointly, among ngo's, gft -- governments, financial institutions are going to manage this to sort of offset the risks and so that's sort of more of an

intellectual exercise that you would need to, maybe the government could host it or we'd provide the framework of the discussion. the second is to work with third party jurisdictions, again, there is precedence for this in other humanitarian crises, particularly regarding with yemen, for example, where the united states has worked with a third party jurisdiction to restore banking in a country that has, that has broad-based liquidity, regional access, also has enough dollars on the books. the third an is a special purpose vehicle and this is something that may be familiar to some in the iran context, in the wake of the maximum pressure campaign under the trump administration on iran, that several organizations together

with the e3 government found a way to provide humanetainer to -- humanitarian aid to chiron -- iran outside of the u.s. of dollar. and this is a potential way to establish a commercial, commercial liquidity outside of humanitarian aid framework, to off shore the risks from the commercial banks to allow for a sort of closed loop, enhanced due diligence mechanism built in and with the funds and the recipients of funds would not be linkled to the taliban. now, this could function within a commercial bank or separately, but would need an initial liquidity injection to sort of start the transaction and again, that would be a potential method to allow for the againing

-- beginning of commercial trade. the fourth option is unorthodox and that's actually digital currenties and a block chain technology. there's a group of very serious people working on this at the moment and it does require that broad scale access to telecommunications, and smart phones and have internet, but it does provide an avenue for donors, especially if you're thinking about individuals who want to pass small amounts of money between between to friends and families in the country or getting gulped up within the commercial banking sector or remittance organizations or money grams to place cash and fiat into digital tokens, right. that's then transferred on the ground and for cash and if possible, actually the digital currency, again, it's a bit of

an idea, but as a group collectively, we felt would work -- was worth consideration for extreme cash shortage on the ground. and again, this is a short overview of what we saw and i was happy to go into those further and go into the xer expertise of my colleagues. >> thanks a lot. and i think that your reference to other examples from other country case studies was useful and it's one of the big challenges of this afghanistan situation and arguably unprecedented with a serious economic cries cities and to have the government sanctions that's not recognized by any country. so it's useful to hear from those other cases. thank you. we are going to go to a discussion soon, but first, last

but not least, want today allow tony wayne to offer some opening comments. so ambassador wayne, over to you. >> thanks for the wonderful sharing of ideas and analysis for the others who are with us today. they've given a very good view of the challenges in the current situation and a number of the ideas going forward. i want to reiterate that we're not going to be as those who care about afghan staying alive this winter. we're not going to be effective if we don't get better ways for money to flow into the country. the u.n. is working on a cash swap which is bringing some money in, but it's not sufficient to meet the humanitarian need. the u.n. has said that they were asked for $8 billion worth of assistance to meet the needs for this year. they've projected that you could end up at the end of this year

having 97% of afghans in poverty. there need to be effective channels for getting cash in, for changing those dollars into afghani as mentioned and there also needs to be ways to get this economy going again or you're just going to push more and more afghans into poverty. we're already seeing regular reports of that now, of people who are well-educated who were in the afghan middle class, who are running out of money. and they, and as julia mentioned, even the small amounts coming in, small amounts of money can't come in, so if you have family outside that wants to send you money, you can't really do that right now. so we need to work on these systems urgently or the humanitarian reasons that so many people are donating individually in the united states and working on this and not only in the united states,

europe and elsewhere, so there's a tremendous immediate and short-term need to get these money flows working and we have a number of good ideas. i think it is key that international donors the imf, the world bank and the u.n. work together very hard on this, and that includes the u.s., but the u.s. isn't the be all and end all. it should be an international effort and i think there are ways to reach concensus on that. the u.s. is important because the bulk of the money that was in the afghan central bank is in the united states. my understanding is that globally nglobal ly in all countries, an estimate $9 billion worth of reserves. they're broken up and khalid mentioned there are traditional governmental preserves probably

will wait for a recognition, a negotiation, which is not anywhere near at this time because of the whole bunch of concerns that michael mentioned at the beginning. including the representative, inclusiveness of the government, human rights, counterterrorism, counter narcotics, a whole bunch of lists that donors are concerned about with the taliban government. but there is other money, there is a lot of money in there. some of which, as we've read about in the new york times today. may, in fact, be released as part of this court case in the united states, which could be good and part of that would be for humanitarian needs, but it's important to recognize that an important chunk of that money actually belongs to individual afghans and afghan businesses, and the commercial banks that were being held in the central bank. so this isn't former government money or taliban government money. a lot of it belongs to afghans not at all tied to either government or the taliban.

so they have legitimate claims to this money and that money, if released over time can also help with this liquidity and getting the economy going again, keeping people employed, creating more employment and so it's very important that we move in that direction, also, and think about that as we go forward. and i want to reiterate the point that several of our speakers made about using afghan capacity. there are a lot of well-trained and very capable afghans that can contribute to this solution. and that includes people who use today work in the central banks who have left the country, but i had a number of whom have given the right signals of protection and independence would be happy to go back and help the system function.

help the system be start to function again within afghanistan and between afghanistan and other countries. so, i think we need to look very carefully how we do that and how we can as some of us used to say in financial areas, bring a ring fence around the central bank, ie, make the central bank independent in a satisfactory way so other countries and donors are sure that the central bank is going to be neutral. it's not going to have political interference and that can help in the function of making this economy work again to meet the basic human needs of the afghans. so, that's a key area to work as we go forward. and so i won't repeat the many points my colleagues made, except to say that we have to keep focus on getting sufficient aid in and getting it distributed to meet basic

humanitarian needs, to pay salaries, to keep health clinics open, we're going to have schools that can open again in march and will teachers be paid, will this be paid? and then they'll keep looking at how we can strengthen going forward those secure systems, as julia said. there are a number of good options and i really think, i know the governments are talking with the international institutions, but we need to see some progress on this, and hope to see some progress on that soon going forward. so, as in the case, and i do think it's really important to remember, there are other cases. there's yemen, there's syria, where and others where money has been able to get into very disastrous situations and relatively safe ways. and that ways that can convince, even the skeptics in the united states or in other countries, that yes, this money is going for its intended use.

so, let's open it up for discussion and turn it back to you, michael, thanks. >> well, thank you very much, tony. he did a really great job with highlighting some of the kiddie -- key points. so we have a large number of questions from the audience so i'm not going to ask too many questions, and i hope similar discussion. the first question i will post to the panel is i hear very frequently from many individuals, there's so many challenge working with risk averse banks in the west and specifically the idea of there being a struggle to convince these banks that they can indeed send money to afghanistan without running afoul of the regime. the question is how to make that case to banks that it's safe to

do this, a conventional wisdom, you need to put the documents and comfort letters out there and assurances to banks and it's ok to send money in. but this is a challenge. but i'd be curious if anyone would want to address this for fear of the concern of running afoul of sanctions. would anyone like to comment on that issue? yeah, please. >> i believe that banking is a bilateral issue between an afghan bank and a foreign bank. so the foreign bank really you are looking how does it, level of the corporate governance, how

do all how are they managing? [indiscernible] of the shareholders and the banks. this issue is not, when i was in the central bank i was talking with the commercial bank, the central bank of afghanistan cannot do anything encourage foreign banks to be, foreign banking, it's only it's up to you. because it is a bilateral issue. if the foreign bank does not this bank on accepted rules of the bank, commercial bank, the corresponding corresponding system. the banks who are able to reach this level they had relations with the banks, some other banks, i believe it relates to

the banks in afghanistan. it's not an issue that the government of united states or the government of foreign countries they can force their banks to have relations with afghan banks. you know in afghanistan, there's a lot of problems now in money, drug money terrorism, and the , relations with this many in afghanistan. many of them, not many, some of them are involved in drug money, you are involved in dirty money. so i believe that it's not an issue that the government here can encourage because the foreign banks would ask their government, ok. if anything happens and i was not responsibility and that the money goes through [inaudible] i

don't see a very short or solution of it. the only thing, the central bank of afghanistan, the taliban, it should be and then political and -- on political and independent organization. really this bank is an independent not a political instrument in the hand of taliban. they make a deal with them. appoint a independent governor and they had to govern with independence and security, and that's the only way. i don't see any other way. thank you. >> and i can jump in here a

little bit, too. i think that there, the licenses that were provided by the u.s. treasure are actually unprecedented. right? i can't recall something that actually was the equivalent of we will not prosecute, all right, not prosecute, or fine. and you know, so then it is a question of commercial gain from large western banks, which will see which, you know, had a profit to gain while there was a large western presence in the country and they were a part of essentially an economy that was supporting the western presence there. so, again, i also do not see the, share the assessment that a large commercial banks will not re-enter the country and that's why we try to think about ways to intermediate between western financial institutions and

afghanistan and other ways of building, and other ways of delivering liquidity. i don't see that moving in the near future. so i would just add that this is going to be it's confidence building measure. >> because julie is right. there's space in the treasure licenses, but banks have to assess their risk, reputational risk, and versus the benefits. as there's agreement on institutions that in a sense are working and are felt to be secure with money flow and others, if it's seen that the central bank is independent and has international oversight too, , there may be more banks willing to come back in. but this will be a gradual

process and they will have to see that there's reason to be confident operating. and it's not a lot of money, as julia says, they're not going to make a lot of money. so this will be gradual. not too soon, i don't think. >> ok. so, i would like to highlight one point. there are two parts in the banking relationship. one is making a new correspondent bank account with one of the foreign banks. and also the collapse of the previous government. the issue with the bank. so, by examine with the commercial private bank. they have corresponding bank in u.s. dollars to nominate

currency with turkish banks they don't have any problem for the corresponding banks, any transaction has to clear and the u.s. bank process. so they see after our corresponding banks, we are not permitted to do any fulfillments inward or outward's related to afghanistan transaction. and we have heard this before when western union was licensed by them, then we started operation of western union, but we faced a huge challenge. it was in for a long time.

and the culture the concept of western union they tried a lot to send our funds through the number of u.s. banks, but the u.s. banks denied to process western union transaction. and finally, we advised our corresponding banks to open their account with bank based in europe so now they're doing all the settlements with the bank itself. so this is basically a matter of opening bank accounts, this is to it's not the issue of last six months, this challenge remains from the last two decades of afghanistan banks. thank you. >> well, thank you. very useful answers to what to me is a very conconsequential question.

so thank you for that. i want to pose another question and i will put out what i would describe as a unorthodox recommendation that is been put out there. it relates to the afghan central bank, that we all agree is such a critical issue given the centrality of the institution. specifically there's been an idea of ford about the possibility of privatizing the central bank in afghanistan, which would entail a separate private bank with no ties, taking on the responsibility of the state bank. one of the major incentives of doing this would be to avoid risk of spending money and getting access to the private bank and it wouldn't be an issue. if anyone wants to respond, as

it seems there are so many other less on orthodox means -- on orthodox means to work with the existing central bank come up with something new? defender and forth like to address this whether it's privatization plan with the central bank. your logical person to respond. >> the guaranty in afghanistan, they will never interfere in the activity. a number of international banks are probably denied them and asked to be in contact with them and also in the transaction.

the challenging of the authority authority -- they would not accept that. the banks of afghanistan, it's real and dependent and it's the personal view in the government ensures they would never interfere in the banks activity and the furthering law. and install a nonpolitical person. in the government gives their insurances that there would never interfere with bank issues because they would run the banks activities. the law of the bank, the afghanistan bank. it is a possibility in the private bank and the central banks activity.

it's the issue to encourage them. all others controlling commercials bank, those transactions in foreign countries, all other functions of the central bank can be transferred to the private bank, only if they have the authority to issue and print. it is a solution, but i doubt the taliban government would be willing to accept this because it would be a challenge to them. thank you. >> thank you you, anyone else want to respond? i wanted to pose a question about a decision that the taliban made it back in november to ban all foreign currency and afghanistan.

i believe was back in november, quite some time ago. several of you have noted the importance of ensuring that you have emphasized the more local currency but still this is the country that has been so heavily dependent on dollars for so long. it would be drastic to come out with a economy where there is no foreign-currency at all. do you think that this decision by the taliban, i do not -- i am not sure it has been enforced, is a something that could impact the types of innovations and the ideas you have all laid out? emphasizing the u.s. dollars dollars, is this an important decision, doesn't have an impact on the issues? the taliban decision to ban all foreign currency. anyone want to address that? >> if i may, michael.

i think from what my understanding is, talking to people on the ground, it is banning transactions in other currencies. meaning that afghani's should use as the primary vehicle for all transactions. i think it was a timely and good decision. the way it was enforced, there was also another aspect of it. a lot of foreign currencies, maybe the u.s. dollar, was smuggled out of afghanistan. it accelerated over the last four or five years. two iran, central asia and through central asia to around. that has actually helped stabilized the afghani versus u.s. dollar exchange.

otherwise, when we went into this and normandy -- enormity of the economic challenge, the advantage would have been worthless by now. and has not impacted any of the small amounts of money that have come in u.s. dollars, the central bank so far has done the right thing of making sure that it moves and it goes to the intended purposes. i commend them for this, i think it is a timely decision and helped with price stability. >> yes, go ahead. >> i believe, and i've said this before, there's a timely

decision with price stability. afghanistan, 24, 25 years. southeast, [inaudible] in kabul, there were 17 plus, even going to buy a used car. the west part of afghanistan, they were dealing with iran. and in a couple -- kabul, even when you are trying to buy a used car it was in dollars and rupees. so it needs all of these things, stability and economic you cannot cause the issue. first stability, political stability. and then other people. you cannot solve the problem of

the language. you may remember pakistan two months ago or a month ago, they announced given commodities for afghanistan. i don't think it is a good decision the current the. -- for the currency. it is economic and political security issues. it is a gradual issue. it cannot be one or two years. it needs economic development and stability in the country. thank you. >> well, thank you.

we appreciate those interventions. i want to start getting to the audience questions now and the -- in the time we have left. i want to get to as many as we can. the first one which is posed to anyone that would like to respond, did the taliban have development model? how did they seem to last few months especially since august and september when taliban took over relate to afghanistan history from outside kabul and rural areas? i don't know if anyone would like to address this question of whether the taliban has a ny type of development model. i know many of you are economists. tommy, please. >> i don't think they do have a development model and i don't think they have a uniform policy. i think they are still figuring out how to govern the country, they are trying to figure out how to deliver services, they are not used to delivering services on a wide scale.

there is a great deal of learning going on and as holly was saying earlier, they are going to learn how you gain legitimacy as a governing force. you do that by being able to deliver basic services to people and keep the economy going. i don't think they have all learned this. my suspicion is they have a number of different approaches to how this should be done. i do think on the humanitarian front, i hear from ngo's and un representatives and others, they are giving wide access for humanitarian delivery, and that is positive that they are doing that. and they are learning the importance of international ngo's, and i understand they are gradually

learning the importance of the expertise and afghans who have then in ngo's and the importance of those organizations. but i think it is still going to be a long learning experience. i understand they've come up with a short-term budget. you could say something about that. but they have a lot of learning that they can still do, period. >> i completely agree there is not a development model. but the most frustrating issue is they don't listen to people who want to understand this. they have the experience within the government -- when the government has been in different. they have to their credit cap to a few good people and the ministry of finance, and the budget and treasury management, which thankfully were not

replaceable given their expertise. they have gone with moving quite a few good people and afghan institutions that always struggled with capacity. the ones who were relatively better were functioning because of capacity at the top. the best functioning ministry in and the more sophisticated ministry of finance, you have a handful, 100 good people, and they have gone. taliban's focus in the model is in the private sector development, but that mostly has been refocused on how to reduce hindrances. you cannot run an economy on imports. but also, you cannot grind down taxes to zero. you need to collect taxes and

demonstrate your budget. i know how people who have worked with them, there was a a lot of suspicion. they did not want a budget. they said, we have an economic committee. we have been gathering taxes for the last 20 years. why would we need a budget? to have a three month budget come up with them to move back the budget three months was disappointing because the whole reason of having a budget started in the winter. if you get all the logistics and procurement and everything settled in the three months before the spring so operations could start without delay. they have showed they've done a decent job in collecting revenues from customs, but where do those revenues go?

what do they show in terms of expenditure? nothing has been seen so far. so unfortunately, there isn't a model, development model. there are opportunities, but hopefully the stability and right now that is there, they have to work on agriculture and mining and other areas. but overall, it has been disappointing. they've moved quite a few good people, even humanitarian aspects. some people that they have brought back and people that have challenged the basics. it takes a lot of time and headache to convince them why ngo's should be able to operate, why you should not meddle in

those activities. but overall, i don't see any development model. >> thank you very much. i think a broader question to be asked as well if the taliban has a governance model, and we know historically these problems have resolved around justice and all of that. the taliban of course did operate shadow governments during the years of intrusion see -- of insurgency, and yet we heard soon after the takeover in august it was struggling to carry out the basic tasks of governance, such as collecting tariffs at the border. i guess they've learned some things because they have been collecting revenues successfully, but what has become of that is unclear. a question now getting to the international relations aspect of all this. this sort of picks up on something -- on some points that tony made.

the question is, it's a two-part question. is there one particular actor, one country, one institution, that really needs to step up and lead a global effort to initiate an economic recovery? i think it is true what tony said, that we can't necessarily expect the u.s. government to play that role. but that raises the question we . everyone wants to get involved but often times you don't have one person that steps up and takes charge. it's procrastination and people expect a free ride. that said, isn't it important for the u.s. to play a lead role? the second part of the question, should there be a primary negotiator within the community international community to engage with the taliban? and if so, who should the

negotiator be? it is a tough two-part question, rather complex, but if an alien -- but if anyone would like to address this specifically, should the u.s. play a more overall than it is now, or should there be a separate entity leading this effort? yes, go ahead. >> that might sound like a cruel joke, but what we have read on the new york times this morning, i think if the u.s. does less, it may be better. i did not want to put this in my opening remarks, not to overshadow this discussion, but it depends on what the decision on the reserves is. this is the single most biggest

blow you can develop to a developing economy. afghani would be a worthless piece of paper if you don't have the assets in the bank account. even if it is locked for years, for decades, that would still be better because that's what the main purpose of it is, the currency's backing out. i think these blunders, for the u.s. to show global leaders these are examples, but unfortunately these are blunders after blunder. how would the ukrainians feel about the u.s. support right now when they see this? but on the actors on the ground, i think they've done a commendable job. they need support. they need support from other institutions as well.

political messaging. they have seen us. but they need expertise. that is why i mentioned you need the imf and the world bank on development, on monetary and fiscal and macro issues to engage, and to some others who bring expertise to different areas. how would you go about using the national solidarity program that is looked for governance? these are expert questions those institutions can answer. they need more support and they i am hoping the imf and world bank boards enable them because the management and the people who are working are desperate.

they understand the gravity, but they need signals from the boards in order to be engaged. >> thank you. anyone else? i think you made a very important point there. indeed -- [crosstalk] >> go ahead. >> i agree. i agree with what you said about the high school project. no one has blinked first, and everyone is in essence waiting for the u.s. to show leadership. i agree the u.s. cannot do it alone and i agree with the panel that there are problems with the decision that was essentially reached today, understanding the bind the u.s. does find itself in.

that's why this collective assessment idea, it can be seen convened by the u.s. government in conjunction with other partners who also hold reserves, albeit less with international organizations together, and come up with selective solutions. otherwise, no one sees advantage here. >> just to add on that, i do think the u.n. needs to be in the lead right now. there is a decision coming up on a renewal of the mandate of the un's special representative, and i hope there will be consensus to strengthen that mandate going forward, even if it is only for a year more because they are clearly the main actors on the ground and they are doing a lot of good work, and it is a really hard situation. they don't have all the answers, they don't have all the support. but they can do that and talk to both sides. i think the u.s. has a very

important role to play in the convening of other donors and international institutions, but it needs to be in a way that is not the u.s. campaign going forward. it needs to be an international campaign with the u.s. as a big, important player in that because it brings a lot of potential resources. but so do the europeans and so do others. i think doing it together and doing it with the world bank, the imf, the u.n. helps add a legitimacy and a solidity to the recommendations you can get going forward. but that effort needs energy and drive that is sustained going forward if it is going to make positive differences in the lives of these millions and millions of afghans who are in danger. >> thank you very much to you, tony, and julia.

julia, this question is specifically to you. i will pose that to you before we move on. it is really more of a clarification question. the question is, what group are you working with, and where can we read on these channels to get money into afghanistan? if you just want to provide a clarification on that. >> sure, thank you. we will be putting it out shortly, the documents. each of those recommendations reflect conversations with specific actors. we have anonymized them, but if you or whoever is asking the question would like to get in touch with us, we are happy to help. >> thank you. the other question which i think is a very important one because i am not sure we got into specifics, how do we find out which banks in afghanistan have strong capacity in governance? obviously that is a subjective question, but i don't know if anybody would like to

address that. are there existing resources that can get more information on capacity in the banks of afghanistan? >> yes. the banks are weighted by a central bank. so we have banks with the rating. there are two banks with rating two. there are two or three banks with rating three. they are good banks. >> thank you. anyone else? ok. we have about five minutes left. i want to pose one or two more questions to the extent we can.

that is tough to ask a question during the medium to long-term term, given there are so many complexities, but i think this is an interesting question to pose. i will pose that from our audience. is it a feasible possibility to consider creating an roc like arrangement, straddling the afghanistan-pakistan border with preferential access to u.s. market enforcing this and reproducing goods that come into the u.s. with preferential access it. is a case of putting the cart before the horse, but would anybody like to discuss this? does that something that could feasibly make sense to contemplate down the road? if not, that's ok. i understand that the focus is very much on the medium term right now. >> i can.

the whole idea this local regulations that don't favor development. but you have to ask, this harkens back to the question, what are we exporting back to the u.s.? probably not much. it is a bilateral treatment that has been impacted. i know with iran and other countries traders would take money in briefcases. they have done it in the 1990's, but the greater question is, how would you make the whole economy work? you can have good examples of it working in a really terrible situation for the people.

i don't have a lot of expertise but i don't believe that would address most of the afghan issues. if you don't have a lot of experts that roc's would support, i don't think they will have a significant impact on the overall economy. >> tony, were you going to say something? >> no. there were going to be very commentary consistent with what khalid said. you have to get the whole economy running first and see what this trade framework comes up with with this taliban government. i think just to reiterate, we are talking about trying to meet the short and medium-term needs and get the economy get liquidity flowing to help with

the humanitarian problems and keep people from falling into poverty, keep the economy alive. so there's a whole lot to do. and there is this whole agenda that international wider donors, world donors, and even the regional countries have with the taliban before you get to other discussions of deeper relationships with the government, let alone recognition. as i mentioned earlier, as we all know, there is the human rights issues. the women who have been disappearing. there is the issue that this government is still not inclusive. it is not ethnically inclusive and it does not include elements in the taliban. there are still big questions people have about counterterrorism and all the drugs being produced. so there is a whole lot that is going to have to be worked through gradually between

regional countries, countries who want to support afghanistan going forward. but there is a real short-term need to help afghans survive this horribly difficult period and to not have repeated humanitarian crises. not have next winter be as bad as this winter. that is what we are looking at right now. and there will be a record of cooperation that will emerge throughout this dialogue and this work in these months ahead. >> thanks, tony. to those issues, the rights and inclusivity issues, today there have been reports that several foreigners were kidnapped by the taliban in kabul. this is unacceptable clearly and these are things that cannot be ignored. we are just about done. there's one more question that is a broad question. it could be its own separate session that i think could allow one or two of you to offer a 30

second elevator speech as to what the finer -- final word is on this. what would be the message to u.s. congress on how to address this issue? so, i would invite, if a few of you would like to offer a 30 second elevator speech you give [video clip] -- you would give to a key member of congress or senior staff, i would invite you to do that right now. anyone want to do so? >> i would say, as in many situations, we cannot let the perfect be the enemy of the good. the priority at this time is to find ways to help keep afghans alive, help keep babies from dying, help keep mothers from selling their kidneys, help keep parents from selling their children. that is what we need to focus on in the near future.

and focus on when people are arrested or disappear or do things like that. we need to be tough on that also. and so, we have to be bold in that humanitarian concern about afghans that we have worked with for 20 years and shown great care and investment in afghans. not in any particular country. so we need to move to do that while we address our long and -- medium and long-term concerns about the people who are currently in power. >> if i may as well, i think the u.s.'s responsibility with the evacuation does not end. they want to see afghanistan in the rearview mirror. i think ignoring afghanistan will have bad consequences, not just for the u.s., but the whole

world as well. we have seen this time and again. i hope the u.s. congress and the administration understand they still have a big moral obligation. it is not just for saving afghans. but also for stability. what sort of an ally is the u.s. in the future if this is how people are treated? i think it is time for the u.s. to show leadership. everyone, including big western countries, look up to the u.s. what are the u.s. going to do? i think they have to take the leaders who whole and help -- take the leaders and help. it is important. it is not just morally and ethically the right thing to do, but it is also for the long-term u.s. interest, not in the

region, but globally as well. >> well, thank you very much. and i think just looking at that question from the immediate term lens, i know many on the ground are very concerned that once the winter in afghanistan ends that global attention even on relief experts, even -- efforts, even on humanitarian assistance, will wind down, and clearly that is not acceptable. it's important to have discussions like this and for this terrific group of experts to keep doing what they are doing, keep attention on this issue. we are going to do this at the center. unfortunately we need to wrap up but i want to thank our panelists for joining us. and particularly joining us from kabul, where it is evening. and thank you to the informal group for cohosting this. thank you for the audience

tuning in. thank you for the great questions. sorry i could not get to all of the questions, but i really appreciate everyone for taking part. we will conclude. we are adjourned. everyone stay well, stay healthy. >> thank you. [captions copyright national cable satellite corp. 2022] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> earlier today, president biden signed an exec at a border that would split afghan frozen assets to help fund humanitarian relief efforts in the country, as well as create a trust fund to compensate 9/11 victims. billions of dollars of afghanistan's assets were frozen after the taliban gained control of the country in august of last year. >> a senate subcommittee investigates ways to recruit and retain health-care workers. watch tonight at 9:00 p.m. eastern on c-span, online at c-span.org, or c-span now, our video app. >> get c-span on the go. watch the day's political events

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